The chief constable of Cleveland police has been sacked for gross misconduct after a disciplinary panel found he had lied to the police watchdog and ordered a member of staff to do the same. He is the first chief constable to be dismissed for 35 years.

Sean Price tried to mislead the Independent Police Complaints Commission (IPCC) about his involvement in recruiting the daughter of the then police authority chairman, actions described by the watchdog as "shameful".

The disciplinary panel sacked Price from the force with immediate effect. Joanna Greenberg QC, who chaired the panel, which concluded on Thursday, said there was no doubt his actions had breached professional standards over honesty, integrity and discreditable conduct.

Greenberg added: "The most serious allegation found proved against Mr Price is that he persuaded a member of staff to lie in the course of an investigation into his alleged misconduct. As such he was seeking to pervert the course of justice."

Nicholas Long, the IPCC commissioner with responsibility for Cleveland, said Price believed that as chief constable he could order others to do as he saw fit. He said: "Sean Price's attempts to mislead the IPCC investigation by lying and putting pressure on a member of staff to lie on his behalf were shameful. He almost got away with his attempted deception. However, the member of staff in question showed great integrity and courage in refusing to be bullied and stood up to him by asking to submit a new witness statement to the IPCC, fully explaining Mr Price's role in this matter."

Price said he was "extremely disappointed" with the decision and still denied wrongdoing. He said he would consult his lawyers over what to do next. He said: "I believe the disciplinary proceedings have, sadly, come to an incorrect conclusion."

The new chair of the police authority, Stuart Drummond, told a press conference that Price did face 18 other misconduct charges dating back more than five years. These will now be dropped as he is no longer a police officer. Drummond said he hoped to release details of those charges so "people can make their own mind up".

He added: "The two counts that have been found against Sean Price relate around dishonesty and as a police officer that has got to be sacrosanct. As a member of the public, you need to have the utmost faith and trust in a police officer so I am really disappointed."

Cleveland police are now being led by Jacqui Cheer, formerly deputy chief constable of Suffolk police, who has been appointed temporary chief constable.

Price remains on police bail pending further enquiries connected to Operation Sacristy, an ongoing investigation into corruption connected to the Cleveland police authority.

He was found to have exerted "undue influence" in the award of a job to the daughter of Dave McLuckie, who was chairman of the police authority until he resigned last year. Price denied any wrongdoing. The statement about his dismissal stressed that McLuckie's daughter had done nothing "untoward or inappropriate".

Price was initially arrested alongside Derek Bonnard, Cleveland's deputy chief constable. Bonnard remains suspended from duty but is no longer on bail connected to Operation Sacristy. Last month Bonnard said he had been unfairly targeted. He said: "For 26 years I have been a highly professional police officer and I have loved being a police officer. But for the last year I have lived with a level of shame. I have done nothing wrong in terms of criminality, but I have suffered abuse in the street, where people have made reference to me as a criminal and that is very difficult. It is completely incorrect and unfair."

The last chief constable to be sacked was Stanley Parr, in 1977, from the Lancashire police. A Home-Office-commissioned report, leaked to the press, found Parr had repeatedly intervened in cases, including a cover-up of the circumstances surrounding a fatal car crash.

Price's dismissal comes after questions about several police chiefs and at a time when the service is under considerable pressure from financial cuts.

Last July Sir Paul Stephenson quit as Britain's top officer over the phone hacking crisis that engulfed the Metropolitan police, followed the next day by his assistant commissioner John Yates.

Another four chief officers remain under IPCC investigation over allegations concerning a murder case investigated by the Staffordshire force where they all once served, including Adrian Lee, current chief of Northamptonshire.

The Association of Chief Police Officers lead on professional standards, the chief constable Mike Cunningham, said senior police officers should lead by example and the public expected the "very highest standards of professional conduct".

"Policing is a complex and high-profile public service where leaders deal with serious issues that can attract complaint. One of the police service's great strengths is its transparency and openness to challenge," said Cunningham.

"What must be recognised is that the public we serve overwhelmingly have confidence in the police. The service is currently facing wide-ranging reforms but the commitment of police officers of all ranks to get on with the job is unwavering."